It seems that the complex world of dual fuel technology is starting to sort itself out with certain clear preferences among ship segments and owners’ choice for a particular fuel-type technology. The table on the right-hand side compares Carbon Intensity as well as Energy Density Factor (MJ/kg) published by IMO and helps us to determine which fuels would meet the IMO 2050 objective of zero carbon emissions (only green methanol and green ammonia would qualify). However, the problem with both methanol and ammonia is their Energy Density, in another word, equivalent bunker volume to generate the same engine power ...
Weakening Demand Cycle and Potential Contango Structure
June 21, 2024
Economic activity was surprisingly resilient during the 2022–23 period despite elevated levels of global inflation. As inflation converges toward target levels and central banks pivot toward policy easing, a tightening of fiscal policies aimed at curbing high government debt levels, alongside higher taxes and lower government spending, is expected to weigh on growth. With major commodities priced in US dollars, the rallying dollar we have seen over the past few years has made commodity prices more expensive for buyers around the world and puts downward pressure on demand. The subsequent fall in headline inflation since 2022 reflects a combination ...
Potential Hurricane Season Volatility
June 14, 2024
The US is forecasted to have an above-average 2024 Atlantic hurricane season starting June 1st with a near-record number of storms. Hurricanes serve as one of the key downside risks for US Gulf refineries to shut or reduce their runs, tighten US’s product balances and limit the available exports. Alongside the seasonal maintenance in Spring and Fall, we saw PADD 3 refinery utilization shapely reduced month-over-month by 11.5% in Sep 2017 (Hurricane Harvey), 3.1% in Aug 2020 (Hurricane Laura) and 6.9% in Sep 2021 (Hurricane Ida). These hurricanes have also put a halt on crude and ...
China’s Export Quotas
June 7, 2024
Last month, China issued 18 million MT (136.7 million barrels) of export quotas in the second batch, comprising 14 million mt for gasoline, gasoil, jet fuel and 4 million mt for fuel oil. With the new allocation, the total export quotas for clean products amounted to 33 million mt in the first two rounds, up 18% from the corresponding rounds in 2023.
We expect China to continue releasing export quotas for the rest of the year, reaching approximately 47 million MT for 2024. This is supported by the healthy margins due to the cheap unconventional feedstocks but slower domestic ...
LR2 Switchover Update
May 31, 2024
LR2 switchovers play an important role in tonnage supply, as both Aframax and LR2 fleet sizes are directly impacted by these activities. Tracking by our proprietary commercial database, we have identified a net increase of 51 LR2s joined the dirty-trading market from Sep 2022 to Dec 2023, in line with the huge earning advantage of dirty-Aframaxes amid the Russian sanction impact. The surged conventional crude tanker demand in the Atlantic Basin as well as new demand to export Russian crude from Western ports to Asia have pushed the average earnings for the Aframax AG>Singapore to US $60,600/day ...
